Net Present Value Method and Internal Rate of Return Method for a service company

Buckeye Healthcare Corp. is proposing to spend $$156,446$ on a nine$-$year project that has estimated net cash flows of $$23,000$ for each of the nine years.

Present Value of an Annuity of $$1$ at Compound Interest

Year $6\%10\%12\%15\%20\%$

$10\mathrm{.}9430\mathrm{.}9090\mathrm{.}8930\mathrm{.}8700\mathrm{.}833$

$21\mathrm{.}8331\mathrm{.}7361\mathrm{.}6901\mathrm{.}6261\mathrm{.}528$

$32\mathrm{.}6732\mathrm{.}4872\mathrm{.}4022\mathrm{.}2832\mathrm{.}106$

$43\mathrm{.}4653\mathrm{.}1703\mathrm{.}0372\mathrm{.}8552\mathrm{.}589$

$54\mathrm{.}2123\mathrm{.}7913\mathrm{.}6053\mathrm{.}3522\mathrm{.}991$

$64\mathrm{.}9174\mathrm{.}3554\mathrm{.}1113\mathrm{.}7843\mathrm{.}326$

$75\mathrm{.}5824\mathrm{.}8684\mathrm{.}5644\mathrm{.}1603\mathrm{.}605$

$86\mathrm{.}2105\mathrm{.}3354\mathrm{.}9684\mathrm{.}4873\mathrm{.}837$

$96\mathrm{.}8025\mathrm{.}7595\mathrm{.}3284\mathrm{.}7724\mathrm{.}031$

$107\mathrm{.}3606\mathrm{.}1455\mathrm{.}6505\mathrm{.}0194\mathrm{.}192$

a$.$ Compute the net present value, using a rate of return of $10\%.$ Use the table of present value of an annuity of $$1$ presented above. If required, round to the nearest dollar. Use the minus sign to indicate a negative net present value.

Present value of annual net cash flows $

fill in the blank $1$

Less amount to be invested $

fill in the blank $2$

Net present value $

fill in the blank $3$

b$.$ Based on the analysis prepared in part $($a$),$ is the rate of return $(1)$ more than $10\%,(2)10\%,$ or $(3)$ less than $10\%?$

c$.$ Determine the internal rate of return by computing a present value factor for an annuity of $$1$ and using the table of the present value of an annuity of $$1$ presented above.

fill in the blank $5$

$\%$